So, you’ve got a wonderful idea for a great invention that is going to benefit mankind. The problem is you don’t have the money to get it into production. So, what do you do to get some sort of funding to make your invention a reality?
There’s actually a lot of places as well as organizations where a prospective inventor can get funding. Some of these are from state or federal crowdfunding websites, as well as contests where an inventor can win funding for their idea, along with traditional loans, certain foundations, Social enterprise and fiscal sponsorship, venture capital or by getting a partner with money who can invest in your idea.
Here’s some info on the above examples of ways to get the money you need to fund your invention idea:
Federal and State Grants
One of the best ways to get your patent idea financed is via free money from a grant from federal or state sources. There are 1000s of such grands you can possibly qualify for on sites like grants.gov. You can also get information on possible grants from the US Small Business Administration, as well as the federalgrants.com website.
Another possible grant opportunity is from the U.S. Department of Energy, which provides grants for inventors developing any sort of invention which benefits the environment or those that somehow save energy.
There are also several contests in which you can compete to get money to finance an invention idea. For instance, some business schools have a writing contest, i.e. MIT has a Business Plan Contest where you must be one of the semi-finalists, and then you must submit a twenty-page business report. The final winner will get $100K to use for their business. Plus another such contest is from the University of Wisconsin has a few different business plan contests.
If you aren’t affiliated with any sort of business school, then look into other such contests through places like BizPlanCompetitions. It lists more than four hundred such contests run by several foundations and corporations. Two such contests are the Ben Franklin Technology Partners, which has a $50K prize to the one that offers the top business plan, and Business Owners’ Idea Café has a contest that gives $1000 to businesses which just need to submit an innovative way to solve a basic everyday issue.
These days many inventors get funding via crowdfunding websites. Some of the most popular sites include Indiegogo, GoFundMe, Peerbacker and Kickstarter. If you use one of these sites you either have to get the amount of funding you asked for or all the cash gets returned to the investors.
Another type of free money comes from regional and city grants. Sometimes these cities will help out a budding inventor with a couple thousand dollars that might at least get you started in making your patent idea into reality. To find out if your city offers such grants, be sure to check with your city council office or see if they participate in some sort of economic development plan.
Another source of funding comes from investment angels. These people give money to help out inventors and you can find one via directories like Go4Funding or Gust. An angel doesn’t likely give you the funds without a catch, and they may want some kind of dividend on their investments. Many times these angels are no small potatoes either, as the average amount they have given to inventors is around $600K.
Venture capital is when someone gives you funding by investing in a business startup. Usually the inventor has already developed their business plan and has invested some of their own monies. Then a venture capitalist steps in and provides additional funding. Usually the venture capitalist expects regular reports on how your invention is going and what your projections are for the future.
Social enterprise & fiscal sponsorship
If the invention you are working on has some kind of social mission, you may be able to get funding via social enterprise. This is also called social entrepreneurship. It includes nonprofits, for-profit companies, and civic minded people.
Or you may be able to get what is called a program-related investments, which is sometimes provided to both nonprofits and social enterprises. These are low interest loans which foundations may give to an inventor if it matches their own interests.
And speaking of nonprofits, sometimes a nonprofit will invest in an inventor. A nonprofit could then act as a fiscal sponsor for an inventor. That means you’d have a formal deal where a 501(c)(3) public charity will sponsor your project if it lacks exempt status. Then an inventor can look for grants as well as solicit for any tax-deductible donations using their sponsor’s exempt status. However, those are rare and you would need a good lawyer to set it up.
What You’ll Have to Furnish
If you apply for funding via a federal or state grant program, you will need to outline your invention idea and come up with a good business plan.
Next, you need a prototype of your invention. It’s best if you can show that your invention idea is going to generate at least one new job, which doesn’t count a job for you. That makes it more likely you will get the funding you desire.
Some places want proof you are serious so if you have a business it’s a good idea to incorporate it as an LLC. Plus, if you also have a partner, it makes your business look more credible and more likely to be offered funding.
One thing is certain, if you are trying to get funding for your invention idea, it’s best to come off as professional and dependable to those you are trying to get the funding from. No one wants to fund anyone who has doubts about their invention! Plus, don’t just send an informal letter or email or do an informal phone call to try to get someone to give you funding. It looks much better if that’s done in a professional manner if you really want a decent response.
InventHelp is a business specializing in assisting inventors in making their invention idea become fact. They have the power of many experts in almost any industry you can imagine, as well as staff that are successful in marketing, etc. If they don’t have it they can put you in with the people who can help your invention become a reality. They are able to do everything a new inventor needs. Here’s a few news articles to show you what we mean:
Keep all the above tips in your mind when you want to pitch an invention idea. These tips will help a new inventor to thrive and succeed in making their invention dreams come true via the help of InventHelp!